Buy Back + Burn + Lock up

If we look at the price action for $SBR in the last 3 weeks, it is clear that there is a small portion of users who sell their $SBR rewards as they come in. The majority of $SBR believers including myself are locking up a big junk of $SBR for 5 years which is good but it does not counter the small sell pressure on $SBR. We get occasional price rally base on development excitement like the when we released governance but that is not sustainable price action, we need to actively counter the small daily sell pressure on $SBR. My proposal is for us to do 2 things.

  1. Use 100% of the swap fees to do daily $SBR buy backs and burn
  2. Add a 30 day lock up for rewards

Saber currently generate about 20K worth of swap fee day and they goes to the LPs fo the pool, using the swap fees it to buy and burn $SBR instead bring up price roughly ~2.5% and it is enough to counter the small sell pressure we face everyday. Perhaps a biweekly buy back and burn is better. I know that we have another proposal to distribute 50% swap fee to veSBR holder but I feel this is more urgent in order for us to stop the slow bleeding during these period where Solana is facing some adversity.

As $SBR price rises, everything will be easier such as increasing liquidity reward and granting more projects to be built on top of Saber. I think right now, long term holders are locking up their $SBR anyway and so distribute rewards to veSBR holder is not as urgent as stopping the slow bleed on $SBR price.

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I am against this proposal for several reasons, a few of which are below:

  • Why would LPs provide liquidity if they do not receive any swap fee? 100% of the swap fee to do SBR buy back and burn would cause overall TVL to decrease. Swap fees provide LPs the native tokens they want, not governance token rewards. I think you misunderstand the swap fee. “Saber” does not earn the .04% swap fee. LPs do. The only fee that Saber currently receives is the withdraw fee of .5% when someone removes liquidity from the USDC/USDT pool. This is part of the reason we want the admin fee to flow to veSBR holders in the form of USDC/USDT LP tokens.

  • Liquidity mercenaries will always dump governance tokens. That is something that a 30 day lock up does not fix but only postpones (for 30 days).

I am in support of an admin fee that flows to veSBR holders (see my proposal here: Discussion: Add an Admin fee to be distributed to veSBR holders) You are correct this is not a short term solution. Code needs to be written, tested and deployed, but an admin fee aligns both LPs and veSBR stakers with the same incentives. It also provides a return in non-native tokens, which is key.

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I understand the currently, the swap fees goes to LPs. The proposal below is asking to direct 50% of the swap fees to veSBR holders correct? The reasoning for the proposal below is that the swap fee is small compare to $SBR rewards so even if we take 50% away from the LPs, it is not big enough for LPs to leave the pools. Using the same reasoning, I am asking us to take 100% to do buy backs to do buy back and burns instead. We can compromise on this and do 70% of the swap fees instead, leaving 30% for the LPs. I think as $SBR prices go up, the $SBR rewards will be a lot more interesting.

Discussion: Add an Admin fee to be distributed to veSBR holders

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The slow bleed is a drag at times, with you there. But patching a core element of why someone uses Saber products (SBR inflationary rewards) seems like the wrong direction. The whole point of the rewards is to bootstrap the network, right? Increasing trading volume to overcome (lower) the % of daily volume liquidating rewards should be the objective long-term, IMO. To increase overall SBR volume, Saber products need to keep improving, the team needs to grow and compound good decisions, and the assets held by the treasury/protocol need to grow in value. Leadership is doing good work along these axes, from where I sit. Can always improve, of course :slight_smile:

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  • adding sbr in luna and others partners ecosystem
    yield farming setups , teams plays, GG teams, Let go.
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I really appreciate the inputs and would love to hear more. I think balancing sell pressure and buy pressure is something every project needs to figure out. Even as we create more utility for $SBR by improving the product, the end goal is still the same and it is have more buy pressure than sell pressure correct? I think while we are improving the product, we can deploy simple techniques to support $SBR price and when $SBR utility is able to outpace its sell pressure, we can always stop the buy backs.

By the way, I would not suggest buy back and burn if I think that it cannot outpace the sell pressure, I am suggesting this because the sell pressure is very low and I think we can all agree that if we can get $SBR above a certain price, we can expand Saber farther using other techniques like POL, grants, increase reward, etc.

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Hello can you elaborate on what you mean by “adding sbr luna”?

Dear @knjoeyn @igm the doors/bridges are open

astro too

Listings are done , everybody know each other on higher level.
Not anon dev doxed, real people, real life.
Thank for call
Everybody is welcom , anon dev , degen gambling dev , it is ok

6 Likes

Maybe not as a counter-point, but just another possible direction: I would be more excited about taking a portion of the fees to fund Gitcoin and promote jobs for open-source engineering (or some Ship Capital version of Gitcoin). This would be more positive-sum and might increase interest in the Saber project outwards. There’s actually a precedent here: a bunch of Defi Summer projects balked on giving back, and then Andre at Yearn (at the time) just went ahead and did it. Then it became cool and “the thing to do” which had a big impact on helping build the business-model for open source.

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aye aye sir more than 200 jobs opens sir

sorry but the audience is mixed we have expert core devs intra chain , veterans how are deep dive in ftm and chrorus one jump, and newcormers.
Econometrics model and teamplays or just leave for bottom to be found , than and coordinated whales buy back like xpr or meme tokens pump and dump.
i suggest the jump post to see what supply and inventory surplus and be adjust for marketcap log reg

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We have a separate grant fund for this though?

Yes, an ecosystem fund is discussed in the SBR introduction post and might even include initiatives outside Saber. Thank you for pointing that out. In my mind I was thinking about a long-term commitment based on actual usage revenue rather than creating short-term incentives to sell SBR (i.e. the grantee, reasonably, will want to sell to raise cash to fund their initiative). No point in having both vehicles though.

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I think as long as price is supported with some buying, we should be able to allow occasional selling of $SBR for project funding. This is why I propose this buy back and burn mechanism.

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I think that we should be adding fees to veSBR holders first. It’s more efficient for long term veSBR holders (like the Sunny DAO) to be buying up the SBR w/ fees, rather than having an automated buy that could be gamed.

Our volume is pretty good but the DAO isn’t currently taking any fees on most pools (notably mSOL/SOL).

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@surya , i do agree with you.
@moderators

i m aware the crypto space is involved in some controversial issues , bet let focus on agreement consensus for details.
We can talk and
shitpost rethorticly endlessy , it is pointless.
We have all objectives and net margins and YoY perf for the next years

But i ask to all of you to be civil in the comment section.

So what can be done , in more forms way
yeah i know it is boring

and isnt not mandatory , the voting power is concentrate in hand of few whales , so i will make quick and short.
it is just more realistic to complete
with the legal framework for ftx US reg compliance to improve the sustainability and extensibility of the code.

Grant Proposal: Funding for sbr

  • Project Name:
  • Team Name: T
  • Payment Address:

Project Overview

breif

Overview

*project name –

Project Details

The app uses nodejs and has it’s own database backend where it stored parsed transactions.

Ecosystem Fit

  • The target end users are users of sbr ecosystem . This solution is also not opensource. sbr aims to build a solution that can easily be extended with little development effort that is also fully opensource.

Team

Team members

  • xxx - Project Manager
  • xxx - Software Developer

Contact

  • Contact Name: x
  • Contact Email: x
  • Website:

Legal Structure

  • N/A

Team Code Repos

Overview

  • Total Estimated Duration: 50 working days something
  • Full-Time Equivalent (FTE): 1 FTE
  • Total Costs: $xxxxx (xxxx + x) converted in to sbr based on market value at the time of proposal , to the total cost to cover any price variance during the voting period.

Milestone 1 — Add support for dynamically adding new protocols

  • Estimated duration: 40 something more or less working days
  • FTE: 1
  • Costs: xxxxx USD
Number Deliverable Specification
1 Generic Classifier & Parser - Create a scrapper to go through each protocols transactions and store them in a database for later use
  • Classify the transactions Manually/Automatically and add support for each transaction type in the current version
  • Write test for each transaction type for each protocol.
  • Develop a generic classifier that is able to classify all types of the transaction for each protocol.
  • Write test for the generic classifier.
  • Add parser for some of the transactions that are not parsed by the current parser.
  • Write test for each parser.
  • Develop a generic parser that is able to parse all the transaction types for each protocol.
  • Write test for the generic parser.|
    |2|Add ui for managing protocols & transaction types|- Add ability to add rules for each protocol/transaction type through ui.
    Write unit and e2e test for adding rules through ui
    Protect ui to allow only authenticated users to add protocols/transaction types.|
    |3|Supporting protocols|Minimal Support: sbr partners

Something clear , like a said it no mandatory , but we need clear boring framework to be taking out seriously by us regulators who are watching us.

Not to beat a dead horse here, but as others have said, I think that priority should always be given to active governance participants over token holders with a (potentially) shorter time horizon. I applaud you for locking a sizable portion of your $SBR for 5 years to participate in governance, but question the motive for diverting swap fees away from LPs and (potentially) other governance participants in order to temporarily boost the price of $SBR.

I also agree with you that balancing sell pressure and buying pressure is important, but not necessarily at this stage. I would think that as the Solana ecosystem and Saber in particular attract more capital from larger players in DeFi, more $SBR will be locked for governance and effectively taken out of circulation for (up to) 5 years. Might this natural progression already help to offset some selling pressure?

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That is very true.
The topic can be close or not
it was interesting to have the feedback of everybody involved
I would to thank and salute the incredible work done by
surya

Surya Khosla

You nail it, sir, iso shout out to you
Indeed you were not alone. So shout out to all teams.

Please dear reader, influencers, chronicler, marker maker
don’t hesitate to comment, engage, on social media networks and follow the late Solana trends
Your feedback is really important.

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I want to reiterate that the purpose of boosting $SBR token price to be able to do POL by buying or bonding a sizable amount of liquidity for long term sustainability.

I think distributing swap fees to veSBR holder first is fine. However I still think we need to do buy back and burn after that.

I think we need to consider different participants with different behaviors, the majority of responses seem to only focus on existing big pocket investors? Long term holders, speculators or even those who are just earning $SBR and dumping it right away should all be considered. Crypto is all about building a community and we need to see it from the community’s perspective. By supporting SBR prices through buy back and lock up, it creates excitement in the community again. Yes there is will short term sellers, but there is nothing wrong with that, it is all part of the journey, but at the same time, we will get more community members who sees all the new developments and is excited to lock up their vsSBR and be part of the journey. The worse thing to can do is end up with having just big pocket investors be part of the project.

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Understood. Thank you, ser.

To be clear, I am by no means a deep-pocketed, early investor here. I’m simply a monke that wants to see cross-chain DeFi activity continue to grow and for Saber to play a big time role in that growth.

In my opinion, the team should continue rewarding community members who are aligned with that mission and want to play a role in growing the protocol itself and its TVL, not just the market cap of the governance token.

If you can present some data suggesting that buyback + burn tactics can lead to sustainable TVL growth as well as price action, others may feel inclined to give it more thought. I for one would love to see more data on the topic.

2 Likes